Houston Estate Planning and Elder Law Attorney Blog
It’s a problem that most people wish they had: a sudden influx of money, sometimes a lot of money. It can be overwhelming, and the most important thing to do is—nothing, at first.
The first thing to do when you are newly flush with money, is take a few deep breaths. Then take a long, clear look at your financial status, advises WMUR.com’s recent article, “Handling unexpected wealth.”
Depending on how much you have received, you could be in a very different place financially. You should take an in-depth look at your net worth and cash flow.
What these items show you and how much access you have to your new funds will affect the extent to which your finances might change.
You might have received your assets through a trust, and the trust provisions will dictate how you get those assets. Depending on these instructions, you might not have control over the funds. It’s the trustee who will decide this based on the trust document.
Get a copy of the trust and review the terms with an estate planning attorney. This will give you some idea of the income the trust will provide you.
It’s a different set of issues when inheriting or receiving stock as a gift. Look at your investment strategy to see if the stock has a place in it.
This will help you decide whether to keep the stock or sell it. Instead of stock, you might have inherited real estate. The decision here is the same as to whether to sell the property or keep it.
Your inheritance may also be plain old cash. Think about your future needs and how long your money must last.
Take the time to come up with a well-thought-out plan for both your current needs and your future goals.
New money will likely impact your estate plan. If you don’t have an estate plan, you certainly need one now. If you have one, make an appointment to meet with your estate planning attorney and discuss strategies for protecting your new wealth. You may also need to speak with your insurance agent to see if you are properly insured and review your tax situation with your accountant.
Reference: WMUR.com (December 12, 2019) “Handling unexpected wealth”